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HOUSE_OVERSIGHT_014631

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Deregulation/Gov’t Legislation: There aren’t any clear/obvious changes here that would impact MGM. As a labor intensive business, changes to overtime rules or the Affordable Care Act as it relates to company level costs could be modestly beneficial. Tax Policy: MGM will be a cash tax payer in 2017. Tax policy should be mixed. While they get some meaningful interest shield from their decent amount of debt, they also have relatively high capex that could benefit them if expensed as incurred. Import tariffs should be limited in impact as it’s mostly a domestic, services based business with limited COGS. Catalysts: ConAgg should generate RevPAR tailwinds. RevPAR should accelerate in Q1 and could be up double digits in the quarter driven by a strong convention calendar, headlined by the ConAgg convention which comes only once every 3 years. MGM also opened its $1.4B National Harbor casino outside of Washington on December 8". The first data points here on revenues will come in early January. MGM’s Cotai casino in Macau opens in 2Q17 and is a new $3B property. We believe expectations are reasonably low and revenues are still strong in Macau (+ double digits in 4Q). Despite recent softness, Macau peers still trade at premiums to core MGM Latest report: MGM Resorts International: Notes from the road: MGM National Harbor - the new standard for regionals 1Q risks: Macau sentiment has been fading recently as the RMB continues to depreciate and investors seek new growth opportunities domestically given the large cyclical rotations occurring in other sectors. Company Description: MGM, is a global hotel and casino gaming company, owns and operates 19 properties located in NV, MD, MS, MI, IL and Macau. It owns a 50% stake in its CityCenter joint venture on the Las Vegas Strip and a 77% interest in MGM Growth Properties, a publicly traded gaming focused real estate investment trust (REIT). Norfolk Southern (NSC) Ken Hoexter +1 646 855 1498 Research Analyst, MLPF&S Buy, PO $122

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